Polo Ralph Lauren Corporation today (4 February) posted a 7.1% drop in third quarter profit on lower sales, and reduced its full-year revenue guidance.

The New York based firm said net income fell to US$105m from $113m a year earlier.

Net revenues for the third quarter declined 1% to $1.25bn from $1.27bn, as lower same-store sales were partially offset by higher wholesale sales after the company took control of children's wear and golf apparel in Japan.

Wholesale revenues increased 5% to $655m in the quarter.

Retail sales at the company's 332 stores were down 7% to $547m in the third quarter last year, partially offset by revenues from new stores and growth at RalphLauren.com.

Licensing royalties declined 9% to $50m from $55m, the company said.

Quarterly operating expenses were down 1%.

Blaming the deteriorating economic environment, Polo Ralph Lauren now expects fiscal 2009 net revenues to be flat-to-down low single digits, which compares to earlier guidance of a low single digit increase.

"We are operating in one of the most challenging times our company and industry has ever faced," said Ralph Lauren, chairman and chief executive officer.